Category: Healthcare

According to the story in Modern Healthcare, Blue Shield of California has formed a new company called “Altais”, the spelling of which my spellcheck keeps trying to change. Perhaps that is because it sounds like a terrible disease, as in “I have a bad case of Altais.”

Or maybe Blue Shield sees treating bad breath as a natural extension of being a health plan and Altais will be competing against Altoids. I know dealing with Blue Shield always left a bad taste in my mouth. Anything is possible when your spellcheck runs amuck.

In fact, Altais is Blue Shield’s latest attempt to stay relevant in a changing healthcare environment. Altais will offer management services to the ever decreasing number of physicians in California who have not joined with hospitals to form clinically and economically integrated healthcare delivery systems. The fox is trying to get into the hen house by pretending to be a good guy. Not going to work. The chickens have been to medical school and they are too smart to fall for that ploy.

Blue Shield of California is not the only health plan trying to escape being a commodity. United Healthcare is among the health plans now actually trying to acquire physician practices in a forlorn attempt to avoid not being relevant. That will be an expensive mistake when they learn that physician practices don’t behave the same way a spreadsheet full of actuarial statistics does. It’s the hubris of the ignorant.

It is not fun being in a boring business and that is what the health plan business is. Stand alone health plans (as opposed to hospital and physician owned health plans) really cannot be easily distinguished from one another. The role of any kind of insurance is to manage and hedge risk. Risk management is not the same thing as delivering a service or product. You don’t see auto insurance companies building cars.

Real people—not the “lives” as health plans refer to their members—do not particularly care what health plan they have as long as they have access to their preferred physicians and hospitals. After all, no one goes to Blue Shield’s or United Healthcare’s headquarters with an illness on a Sunday night. Or for that matter, try calling their customer service department for a phone consult.

It is not just health plans who envy the central role of physicians and hospitals in healthcare. The same week the Modern Healthcare article appeared, the New York Times published an op-ed by one of its former writers who bemoaned the fact that hospitals are “beloved”. Being “beloved” is apparently a bad thing in some quarters.

From her point of view, hospitals should be lumped with health plans and pharmaceutical companies as villains. Pundits love finding villains. It’s a living. This was also one of the points of a book she wrote a few years ago which after a brief period of hype disappeared from view. Her present frustration no doubt stems from that experience and perhaps from not being beloved.

Those darn hospitals and doctors really get in the way of the schemers who know better. The public just does not know how bad they are. Here is a message to the schemers of all types: the public does know who, when they have a healthcare need, they can rely upon.

Health plans are trying to weasel their way into physician practices in order to escape being a commodity. Pundits like the one who wrote the op-ed also know the sting of not being relevant. The fact that hospitals and physicians are the target of such actors is a compliment to how relevant healthcare providers are to the public.

Not being relevant is no fun. Being beloved is nice, though, and it is earned as a result of meeting real needs of real people.

I’m back on my home beach after leaving Alligator Healthcare just ahead of Hurricane Dorian. Those kinds of thrills I don’t need.

Instead, it is now time for the thrills, despair and futility of Cal football. My fondest memories of my time as an undergraduate and graduate student in Berkeley include hiking up the hill with my pretty girl friend (who would become my wife) to the stadium. There I learned the value of tradition and the meaning of mediocrity as the Cal football team year in and year out struggled. Still, I held out hope that this would be the year we would go to the Rose Bowl. I am still hoping.

This week I again made the uphill hike to the stadium with my oldest son and an old friend, more slowly and with more determination. My wife, a realist, stayed home. She will be sorry. This may be the year we go to the Rose Bowl. The world needs more optimists and fewer realists. Except in my house.

In the years just before I hit the beach, Cal football was a source of additional frustration. Cal football was now sponsored by Sutter Health, a competitor to my organization. The stadium was plastered with Sutter Health signs. What’s more, sometimes Sutter representatives got to participate in the coin flip at the start of the game. Color me green for envy.

We more than held our own in the competition with Sutter and the other big guy in our service area, the Big K (Kaiser). As I have discussed elsewhere, we were nimble and they, like many Cal football teams, were ponderous. We were managed and governed locally and responsive to local needs. They were not. We more often than not scored a touchdown locally. They often fumbled. The home team won. The visitors lost. I could go on in this vein and it would be fun but I think you get the picture.

These thoughts were triggered by an article in the San Francisco Chronicle this week about a class action antitrust suit brought against Sutter in 2014 by employers and employer trusts that cover their employees’ health care costs. The trial begins this month. The plaintiffs contend that Sutter, because of its size, abuses its market power in negotiations with health plans and is able to force the health plans (the poor darlings) to agree to unfair contracts terms. Most of these plans dwarf both Sutter and the Big K in size but appear to want to be looked at the same way the USC football team looks at Cal–as victims.

Not to be undone, California’s Attorney General, who sues anything and everything, piled on last year with his own antitrust suit against Sutter, probably to compensate for all the years he served in Congress and did nothing. In football, this is called unnecessary roughness. In politics it is called grandstanding.

I know enough about antitrust law to understand that it is complicated for even the average attorney to comprehend, much less the average non-attorney like me. I do know that such legal suits are extremely expensive to bring to trial so the fact that Sutter is doing so indicates their faith in their defense.

Big systems like Sutter and Kaiser developed because of public policy decisions made by legislative bodies. Consolidation of hospitals and doctors into integrated systems was thought to result in more efficient and better quality care. No one really knows whether that is true and studies seem to be contradictory.

I do know that competing against Sutter and the Big K kept us on our toes. I also know that employers could do a lot more to control their health care costs but lack the courage to educate their employees and also confront their unions. In this game, the penalty is being called on the wrong team. We Cal fans know what that is like.

As I write this entry I am actually on a beach visiting my wife’s family in Florida. We do this every August or September to assure that we will be here during peak hurricane season. This eliminates the need to visit Disney World in order to experience a thrill.

There is another way to get a thrill in Florida. Alligators are ubiquitous. We stay in a hotel near a lushly landscaped outlet shopping center and sometimes have a snack in the center’s food court. There are places to munch your corn dog outside next to ponds. However, there are signs warning you while you are munching the corn dog to make sure an alligator is not munching you.

From the perspective of this Californian the healthcare world in Florida is wild and wooly in comparison to more staid California. At home there has been so much consolidation between hospitals and physicians that whatever competition that exists is at a level relatively remote to patients. Not so in Florida where the competition is like alligators staking out territory in the swamp.

Florida, of course, has a population with a relatively large proportion of senior citizens who are full time residents, refugees from high tax states in the eastern portion of the country. They are augmented every winter by snowbirds, seniors who are escaping harsh winters. Together they make a large market for healthcare providers. They also lower the average speed on freeways to about 30 miles per hour. Early bird dinners at 3 in the afternoon, though, are a real bargain.

The competition for patients makes for innovation. It was in Florida years ago that I first encountered the concept of a medical fitness center for both the healthy older adult and the rehabilitating senior. It was a beautiful facility and well utilized by people of a wide age range with programs tailored to the needs of the post-20s crowd. The medical fitness center shared a large building filled with outpatient services of its sponsoring hospital which was located on the other side of the city. A competitor’s hospital was nearby.

NorthBay Healthcare took its inspiration for its HealthSpring medical fitness center from such facilities. Like in Florida, the medical fitness center is part of a much larger outpatient complex. You can learn much by seeing how things are done elsewhere.

Then there are the physicians. The merger of physicians into hospitals to form integrated healthcare delivery systems is much less common than in California. In many instances, they compete with hospitals by operating various kinds of outpatient services. The hospitals, in turn, respond by opening their own centers. Patients have more choices and there is a degree of price competition although with the many Medicare patients such competition is limited.

Florida is still one place that encourages the utilization of hospital emergency services by posting on large electronic billboards on busy streets the current waiting times to be seen in the emergency service. These billboards are frequently located in their competitor’s territory. I have contended in this space that encouraging the use of hospital emergency services may be good from both a healthcare and marketing perspective (see “Excommunicated”, February 26, 2019). Florida hospitals certainly seem to think so given the characteristics of the populations they serve.

On this most recent trip I ran into the concept of free standing urgent care centers for children. I have not seen one of those in Northern California and certainly not twelve as is operated by one Florida healthcare system in an area with about the same population as the Bay Area. Their centers serve patients up to twenty-one years. The website for the centers show the current waiting time for each site. The evening I looked the longest wait was just eighteen minutes. Think about that if you come home from work to a sick child! This is the kind of idea which before I hit the beach always got me thinking and excited.

Alas, there is one kind of competition in Florida which I hopes stays there. Florida leads the nation in Medicaid and Medicare scams foisted on the unsuspecting public by con men and unscrupulous physicians. These kinds of alligators need to remain in the swamp.

I find Florida healthcare for the most part to be a refreshing change from California where competition is much more muted. We need a few alligators here not including the ones in Sacramento.

I am on vacation which some people think is redundant when you are retired. As I write this, I am somewhere between the Virgin Islands and the Bahamas. I was not going to post a blog entry this week because that is a no-no when you have left the beach to take a vacation. However, an article was published today that I could not resist briefly commenting on.

Dating back at least eight years in my old blog I wrote as NorthBay Healthcare’s CEO, I have criticized hospital ratings, the methodology used by the purveyors of those ratings and the motives of the organizations which issue them. In the case of the Medicare folks (CMS), their motives are relatively pure but their execution leaves a lot to be desired. Then there is the sanctimonious organization called Leap Frog whose rating methodology is a joke which they don’t get. The two other organizations (USA Today and Healthgrades) have their own murky motives for issuing questionable ratings.

When these organizations periodically issue their ratings, hospitals howl about the methodologies used and the misleading results. The hospital’s comments are dismissed as self-serving by the almighty raters. Sometimes they are just that. Most of the time though, the comments reveal real weaknesses in the methodologies used by the rating organizations to grade hospital performance.

Today the New England Journal of Medicine in its “Catalyst” publication published an article “Rating the Rater”. Among the conclusions was the following:

In thisRating the Ratersinitiative, we found that the current hospital quality rating systems should be used cautiously as they likely often misclassify hospital performance and mislead.

Now guess who is howling? The loudest howler is the Leap Frog organization which can dish out the criticism but cannot take it. USA Today received a “B” rating, most likely as a result of a recent methodology change. CMS got a solid “C”. The two most problematic rating organizations got a “C-” (Leap Frog) and a “D+” (Healthgrades).

Their comments in response today are funnier than the comedians on my cruise ship. Payback can be a ……….!

“Chief experience officers first popped up in healthcare roughly 10 years ago. The role has only increased in strategic importance for healthcare organizations since implementation of the Affordable Care Act, which tied patient satisfaction scores to reimbursement.” Modern Healthcare, May 12, 2018

“As healthcare becomes more focused on improving the patient experience, the need for having someone in charge of that experience appears to be shrinking.” Modern Healthcare, July 29, 2019

What a difference a year makes. The Chief Experience Officer position which was thought of as being crucial to healthcare organizations is now being subjected to critical scrutiny—and about time. The CEO2, as I liked to refer to the position, had a different job description from organization to organization.

I always thought saddling one person with the responsibility for “patient experience” was a way for other managers to escape accountability for results. It is an artificial contrivance but it sure marked your organization as being cool. Unfortunately, healthcare is so prone to falling heads over heels in love with the latest trends that we forget to be critical in assessing new positions and titles and what they signify to others in the organization.

There are now so many positions which carry the adjective “Chief” that a poor Chief Executive Officer gets lost in the shuffle. There’s a Chief for this and a Chief for that. Many of these positions used to carry mundane titles like “Vice President”. Some of them even served a useful purpose.

Modern Healthcare has a chart with 25 different “Chief” positions. Nowhere on the chart is the title “Chief Executive Officer”. If I was still working and not on the beach where things are clearer, I would probably be devastated.

I therefore propose a new title for the CEO: “Chief Chief” or “CC” for short. If the CC is particularly obtuse, he or she could use “BCC” as an abbreviation. Or if you don’t like that, how about “Chief of Chiefs”?

I once proposed that my title should be “King” but soon discovered that no one wanted to be a prince or princess. I also discovered that not everyone appreciated my sense of humor.

The first CEO I worked for once told me in his down home, funny Texas way that all his senior managers were mice trying to become rats. I knew many people at that hospital who agreed with him, especially on the medical staff.

The Chief Experience Officer may be going the way of the dodo bird but take heart, there are new titles gaining life. It is apparently no longer de rigueur to be the Chief Medical Officer. Now the title should be Chief Physician Officer. New chiefs are being born everyday. Use your imagination.

So it is goodbye to the good old CEO2 (born 2009, died 2019). From the point of view of staff, one less Chief is good. Getting the job done is far more important than a title.

John Muir Healthcare in Walnut Creek, California, is an organization I have always admired. Blessed with great demographics in terms of the economic status of its community, they have progressed impressively when it comes to clinical services. It always helps in that regard to have great finances.

So I found it curious last week when John Muir made headlines in healthcare as it announced that it would be outsourcing non-clinical IT (why you separate that from clinical IT is puzzling), analytics, revenue cycle management, purchasing and claim management. The press release also said that ambulatory care coordination and utilization management for its physician network would be outsourced.

These activities will be assumed by Optum, a subsidiary of United Healthcare. Five hundred and forty John Muir employees will be offered positions with Optum. I am always suspicious of an organization controlled by a health plan although Optum has claimed in the past that they build a wall between their activities on behalf of customers and their parent. Nevertheless, there is an element of the fox guarding the hen house.

I never had a satisfactory experience during my career in outsourcing integral services to outside firms. My experience was primarily with clinical services with a few non-clinical services as well. Promises that were made were not kept. Eventually, there was an unwinding process which was painful. In light of this, John Muir’s decision is breathtaking.

I wonder what the level of commitment will be by the outsourced staff as time goes by. Working within an organization is different than working outside the organization. If things go wrong, who will suffer the most, the organization which did the outsourcing or the organization assuming these activities as part of a contract? The more such contracts the outside organization has with other health care organizations, the less important the individual health care organization becomes. Optum clearly sees this is as a source of growth and profits. There’s that fox again.

The services being outsourced are not as glamorous as clinical services but in their way very important to survival of the organization. If revenue cycle management (a fancy way of saying billing and collection) is not properly done, the very financial foundation of an organization is weakened. The same goes for the other functions. Restoring these functions internally would be a mammoth effort with extraordinary risks and expense should outsourcing fail.

I expect that there are performance standards built into the agreement with Optum. Again, though, which organization suffers the most if those standards are not met? Call me old fashion (I have been called much worse) but this type of outsourcing which is on the verge of becoming trendy in healthcare does not seem worth whatever savings may result.

This is either a courageous, well thought out move by John Muir or a foolhardy action born of some unknown problem. Either way, John Muir will have many eyes on it as this outsourcing progresses.

We learned late last week that one of my twin 15 month old grandsons will require surgery this week to correct a semi-urgent problem. It would be considered “minor” surgery for an older child but a bit risky for a child his age. The surgery is scheduled for early this week.

“Minor” surgery is what happens to someone else’s grandchild. It is my grandson and therefore it is major surgery. When you add the modifier “semi-urgent”, that is enough to make grandpa and grandma concerned. We have been preoccupied the past weekend as a result. I was not intending to write a blog entry given all the angst.

In the midst of all this, I was researching whether the name “Passama” might have a meaning in the Catalan language which is spoken along the Spanish/French border. That is a long story in itself. This is what happens when you are on the beach.

Doing this Google search on my name somehow led me to a link that allowed me to access the 600 plus blog entries I wrote for NorthBay Healthcare from 2010-2017. Eureka! I have been trying to find a backdoor to that treasure trove.

I made many predictions in those blog entries, some of which I would just as soon forget. I did find one entry where I talked about the 2016 candidates and their stances on healthcare in general and the Affordable Care Act in particular.

I found that entry interesting. I have not asked NorthBay for permission to reprint it here so don’t tell them I have done so. They may close that backdoor! Most of my career was based on seeking forgiveness when I forgot to get permission. My retirement is going the same way except now I am seeking forgiveness from my wife instead of the board.

I hope you find my thoughts in April 2016 of interest and relevant to today.

Memo to Presidential Candidates

April 07, 2016

The 2016 presidential sweepstakes is remarkable for the continuing absence of any real discussion of health care issues. That’s too bad because there are some serious health policy matters that cannot be ignored during a year of national debate.

When it comes to the Affordable Care Act (aka “Obamacare”), the positions of the two parties are remarkably simplistic. That says a lot about the character of the candidates.

The Democrats love Obamacare and defend it at every turn. Memo to Democrats: the Affordable Care Act is a deeply flawed piece of legislation which front loaded the goodies and left the payment for the goodies to occur after the 2016 elections.

With deep Medicare cuts (a way to fund the Affordable Care Act) beginning in 2017, we will see elders have less access to a physician or care. You can also expect to see steeply rising premiums for Affordable Care Act health plans offered to people who have no insurance. Already that is happening outside of California and it will happen here with Covered California – just a little later.

Republicans hate Obamacare and want to destroy it. Memo to the Republicans: You are right that the Affordable Care Act is a mess but simply torpedoing it without a realistic alternative is not a responsible way to act. The reality is that too many people who did not have health insurance now have it and destroying Obamacare results in more uninsured patients not getting the care they need except in already overburdened hospital emergency services. The “hidden tax” of cost shifting will again rear its head, which benefits no one.

There needs to be discussion about changing the Affordable Care Act in meaningful ways. It needs a more secure financial base. We must recognize that “mandating” health plan coverage is viewed by many as overstepping the role of government. Let’s at least begin the debate.

There is one other issue which has been disgracefully ignored for years at every level of government. It is what we used to call mental health and now goes by the less-threatening term “behavioral health.”

You see the result in the streets. Poorly clothed and fed people talk to themselves or make public nuisances of themselves. Many of the homeless are people with behavioral health issues.

There was a time in the 1960s and 1970s when the federal government had a much more robust role. It formed community mental health centers and funded training for psychiatric and psychological professionals. Those times are long gone.

We see the consequences every day in our two emergency services. It is not unusual for NorthBay’s two hospitals to have four to six patients with behavioral health problems taking up space in our emergency services and taking up acute-care beds while we scramble to find a more appropriate place for them to receive treatment.

They have no medical reason to be in our hospitals. They need care and treatment, but not the kind we provide.

This issue is growing across the nation, a silent epidemic stemming from public policy neglect. Yet not a word about it is being uttered by any candidate of either party.

Memo to all Presidential candidates: Get real about health care issues.